Financial Health and Firm Productivity: Firm-level Evidence from Viet Nam

Shandre M. Thangavelu and Aekapol Chongvilaivan
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Shandre M. Thangavelu: Asian Development Bank Institute (ADBI)

Microeconomics Working Papers from East Asian Bureau of Economic Research

Abstract: Does financial health shore up firm productivity? This paper empirically investigates this question and presents productivity as another driving factor in translating financial development into real economic progress. Our empirical framework employs Levinsohn and Petrin’s (2003) semi-parametric estimation of total factor productivity (TFP) using firm-level panel data during 2002–2008, and incorporates financial health variables into conventional determinants of firm productivity. Our findings suggest that liquidity and access to external credit boosts firm productivity, with the latter particularly imperative for exporting and/or importing firms. We also present supplementary results regarding economies of scale, high-tech capital accumulation, human capital investment and foreign ownership.

Keywords: Financial health; firm productivity; Vietnam; TFP; panel data; Semiparametric Estimation (search for similar items in EconPapers)
JEL-codes: O16 O25 O53 (search for similar items in EconPapers)
Date: 2013-09
New Economics Papers: this item is included in nep-eff, nep-sbm, nep-sea and nep-tra
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Citations: View citations in EconPapers (1)

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Working Paper: Financial Health and Firm Productivity: Firm-level Evidence from Viet Nam (2013)
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